Parkhouse sale helps Montco to $540,000 projected budget surplus

NORRISTOWN — Montgomery County projects a surplus of more than a half-million dollars for its operating budget in 2013, Chief Financial Officer Uri Monson told county commissioners Thursday during a third-quarter budget presentation.

“I am pleased to tell that we project to have an annual operating surplus for the year of $540,000,” Monson said. “This would be the first year of balanced operations since 2007.”

Expenditures for 2013 are expected to end $4.5 million below budgeted levels due to the sales of the Parkhouse building and the Human Services Center, Monson said. Cuts in the budget were also made by consolidating departments.

The projected 2013 ending fund balance is $41.2 million, which, according to Monson, is higher than expected and at the recommended 10 percent reserve level. According to the report, a preliminary analysis of the Parkhouse and Human Services Center transactions shows the county can expect to realize $23.5 million in net assets before the end of 2013.

Monson explained that when the county first looked at selling Parkhouse and the Human Services Center, the county was not looking to cut expenditures.

“The driving force was not to bring our expenditure budget down,” he said “It was whether or not it met the goals of government. It is a positive by-product that it brings our budget down, but I don’t want to leave the impression that our goal was to reduce our operating budget.”

The surplus also means the county will not have to borrow money for the beginning of 2014.

“We have sufficient reserves for emergencies. It also means we will not need to do any short-term borrowing for 2014. We will be able to self-fund until tax revenues come in April,” Monson said.

However, tax revenues are expected to be $1.5 million below budgeted levels for 2013.

“Essentially we underestimated the number of people who would participate in the 2 percent early-payment discount. It is nearly 100 percent of people participating in that now,” Monson said.

In the 2013 budget, the county estimated $184.5 million in tax revenues, and its current projection is $183 million.

Monson noted there is expected to be $800,000 in revenue coming in from increased activity at the recorder of deeds.

“That is usually a good harbinger of positive economic activity in the county,” he said.

“Each of the last two years we’ve had to borrow money to make payroll, while the tax money trickled in later in the year,” Commissioner Bruce Castor said. “This is the first year we won’t have to do that in 2014.”

“At this point there is no reason to borrow money in a short-term basis to cover those bills,” Monson said.

According to commissioners’ Chairman Josh Shapiro, the balanced budget and subsequent surplus came from prudent government work and deciding what core functions county government is responsible for.

“The first thing we had to do is focus on the core functions of county government and determines what that cost is and then go out and fund that,” Shapiro said. “We did that when passed our budget last time.”

Shapiro said the commissioners will present their budget for 2014 over the next couple of weeks and at that point there will be a public discussion about whether taxes will be increased or not.

“We still have work to do but it is clear we are heading in the right direction,” Vice Chairwoman Leslie Richards said.

“This confirms this first real balanced budget since 2007,” Shapiro said. “Most importantly we are adding to the fund balance rather than subtracting from it.”

The next Montgomery County commissioners meeting will be on Nov. 21 at 10 a.m.